The Uncertain Future of Gaming
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More people game today, in 2024, than ever; in fact, there’s been a 3.11% upturn since last year, and a year-on-year increase since the pandemic, so why has Sony just cut 8% of its workforce and Horizon cut 10%?
Sony Job Cuts
Sony announced in a press release that ‘changes in the industry mean restructuring is vital.’ Jobs will go everywhere in Europe, Asia, the Asia Pacific region, Japan, the Americas and Africa. No region apart from Eastern Europe and North Asia (Russia) goes unchecked.
Jim Ryan, the CEO of Sony Interactive Entertainment, said, ‘We need to deliver on expectations from developers and gamers to propel future gaming technology, so we are taking a step back.’ Unfortunately, that is basically CEO speak for we have changed our minds, and we are going to make people redundant until we can make up our minds again.
In the meantime, thousands of people who thought tech was a safe bet are looking for work elsewhere. In London, the PlayStation Studio will close, and reductions will happen across Sony Interactive Entertainment in the UK. Sony Electronics has announced job cuts have been made to its Australia and New Zealand arm; this is the second round of cuts since 2014 to affect ANZ.
While consumer interest has remained on an upward trajectory, the way customers consume content has changed. Jim Ryan goes on to say, ‘Our goal is to remain agile and adaptable while focusing on delivering the best gaming experiences now and in the future.’ The statement is predictable and somewhat patronising as they wouldn’t endeavour to deliver ‘the worst gaming experience ever.’ So, what’s at the core of Sony and Horizon’s problem?
Gaming vs. The Worldwide Economic Downturn
Gaming is not immune to the worldwide economic downturn; only last month, Microsoft made 1900 people redundant across Xbox and Activision Blizzard. When vital resources and supply chain issues mean that you can’t get your product on the shelves as per the Playstation 5 console, then pumping resources into new games won’t save the industry on its own.
The war in Ukraine and now Israel and Palestine, and the real possibility of a Trump presidency compounded by further Russian moves mean uncertainty is rife, and the reality of worldwide shortages produces a recessionary mindset that becomes a reality on the shop floor. When there’s uncertainty, the value of global stock reduces, and the knock-on effect means risk-averse business forecasting, and it’s this style of business planning that Sony and Microsoft are embracing.
AI Compounds Job Losses
Job losses were always on the cards as soon as AI became a viable option, and until the way AI is used changes, redundancies will continue. AI can write code, design, and write every aspect of a game. Generative AI enables gaming to evolve based on player preferences, promising gamers enhanced storytelling by creating responsive branch-out narratives that react to a player’s decisions. The only thing AI can’t do is generate an income - yet!
On a positive note, AI will also foster a deeper integration between games and esports as the consumer looks for more in-person experiences. Gaming communities will continue to push gaming revenue and an increase in interest in streaming games. With Amazon and Netflix entering the streaming market, unemployed writers, developers and creatives might well find a new home in the streaming industry.
What Will Save the Gaming Industry?
The gaming industry is no different to any other industry. Economic uncertainty will always play a part, and until the tide turns in favour of more settled times worldwide, we expect to see a global flux in all industries; sadly, gaming is not immune.
The gaming industry as a whole has adopted the ’eggs in one basket’ philosophy; think about it: where are all the computer chips made? 70% of the total manufacturing capacity is in South Korea, Taiwan, and China. Alarm bells ringing yet?
All we can hope for is a global turnaround, but just like any dystopian game (Miasma Chronicles), the end result might not be what you’re expecting - bulk order your copy of The Little Red Book, put on your tin hat and read up on recipes for borscht because, my friend, the revolution won’t be televised, but it will be streamed.
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